New research from global financial technology provider FIS has found that UK consumers remain wary of anti-fraud technologies like biometrics, while at the same time are growing increasingly worried about having their personal information hacked.
FIS’ Consumer Behaviour & Payments Report 2019, based on Worldpay from FIS processing data, shows that despite growing risks around traditional passwords and fraud, British consumers remain more trusting of passwords, and associate biometrics with identity theft and invasion of privacy.
FIS’ research found that 53 percent of these consumers are concerned their personal data will be hacked if using biometric technology, with apprehension most prominent around social media accounts (29 percent) and retailer websites (28 percent). These views are not surprising: UK Finance figures show that fraud grew 16 percent in 2018, which may explain the heightened sensitivity to the use and transmission of personally identifying data like fingerprints.
However, experts have warned that passwords pose the greatest risk to securing personal data, and are an easy target for fraudsters to exploit. Indeed, the National Cyber Security Centre found that weak passwords were the cause of 500,000 hacked accounts in the last year. Yet FIS’ research found that shoppers still prefer to use passwords to protect their personal data, with 54 percent favouring traditional passwords over biometrics.
Consumer anxiety around identity theft and privacy has slowed progress towards more secure biometrics. And while 47 percent of UK consumers surveyed by FIS would consider ditching their credit and debit cards in favour of biometric payments, nervousness due to public cases of flaws in the technology has also hampered adoption.
New legislation drives change, but at what cost?
Continued growth of fraud has led the U.K. Financial Conduct Authority to call for better prevention measures in the form of Strong Customer Authentication (SCA), which will require consumers to authenticate themselves using biometrics in certain payment scenarios. Yet with 34 percent of consumers not comfortable using any sort of biometrics to prove their identity, according to FIS research, businesses face a major challenge in educating and reassuring customers that their privacy is protected while maintaining compliance under the legislation.
“The retail industry cannot wait for biometrics to become more widely accepted before harnessing its technology to fight fraud,” said Maria Prados, VP Global Retail, Global Enterprise eCommerce at FIS. “New SCA legislation shows how seriously the industry is taking fraud prevention, and it is integral that this momentum continues. But this mandate leaves retailers in a challenging situation: wanting to protect their customers from fraud while accommodating consumers who prefer not to use biometrics when paying.
“The reality is that these innovative technologies for secure payments can reduce fraud and enable smoother transactions. But there’s a perception issue, and it is up to the industry to dispel public apprehensiveness and redress perceptions around biometrics.
“In the meantime, utilizing intelligent technologies like machine learning at the payments stage can ensure consumers only have to biometrically authenticate when there is a significant risk of fraud. This is likely to help hesitant customers to get on board with biometrics without sacrificing its anti-fraud benefits. Ultimately, retailers must work towards making biometric authentication a seamless part of the payment process.”
FIS acquired Worldpay on 31 July, 2019.
About the data:
Figures quoted are taken from analysis of a nationally representative sample of over 2,500 consumers in the UK, which analysed purchasing behavior across different buying channels. The research was conducted in 2019 in partnership with Dynata.